Economists forecast slight price index drop

June 15, 2003|By Bloomberg News.

Economists forecast that when the Labor Department reports on its consumer price index Tuesday, the data will show that prices Americans paid for goods and services in May fell for a second straight month.

If it does happen, it would mark the first back-to-back declines since 2001.

A Bloomberg News survey of economists showed that they are looking for a drop of 0.1 percent, after a 0.3 percent decrease in April. Lower costs for energy may have pushed down the measure.

Excluding energy and food, core consumer prices may have risen 0.1 percent after no change in April, the survey found.

Federal Reserve policymakers have said too much slowing in inflation would be "unwelcome" because it could lead to deflation, or a broad decline in prices. Such a development would stifle profits and business spending.